good morning, "varney & company" viewers, we have a treat. nicole is at the stock exchange, futures are traded up a bit. and president obama is cutting his vacation short to continue talks on the fiscal cliff. joining us now is dan henninger from the wawr wall street journ.

does he want to go over the fiscal cliff? some are saying he needs more than he would just get from the rich guys. >> i doubt that he wants to go over the cliff. and i must say, president obama has repeatedly referred to himself as the unique politician, he's different than everyone. there is no politician i know would want to get into a situation like this. and barack obama marchs to his own drummer and it's possible, but i kind of doubt it. >> you wrote a piece in the wall street journal, called "no guardrails", you said the old society kept the politicians in order in washington, self-order and self-restraint. all of those disappeared as a result of the "me" generation and you say that obama is the epitome of a the "me" generation president that he sees things from his perspective and won't bend. >> the original metafor, you do have guardrails on a highway, people drive 75 miles per hour

and occasionally someone gets out of control and drives too fast and you don't want them going over the cliff so to speak, you want to protect them. well, that was, i argued back in the 1960's, remember when people were sit inning in the universities, a nonnegotiatable demand. a thing called nonnegotiatable demand and that was society and people became more self-righteous and self-directed rather than understanding we had to operate within certain rules. i do think it has infected washington. i mean, i would call president obama one of the most self-righteous presidents we've ever had. david: president reagan, for example, stood for concrete things and didn't bend on the principles, because they had the guardrails that allowed them, it made it easier to negotiate with people they disagreed with. for example, tip o'neill, the democrat made a deal for the huge change in our tax structure. there seems no possibility of a deal like that being made now.

>> well, the republicans clearly feel that they've been disadvantaged by president obama and they actually, i don't think, trust him or the democrats anymore because of the experience they went through with the affordable care act. obama care, they've got nothing out of it so they feel they will be hung out to dry if they do a deal. >> you know, there are so many pots and plans clattering around the chamber and what bothers me he is the lopsidedness of the debate. how about the g.o.p. for decades never said we are the ones delivering the middle class tax cuts. these are middle class tax rates that were enacted undergeorge w. bush. we own these for the middle class, not the democrats. why isn't the g.o.p. stepping up for that. >> i guess because they have no historical memory, a democrat hasn't done this since jfk. back in the early 1960's. and he got a huge amount of protest. >> clinton lowered the capital

gains tax and because of that a huge boom in the stock market. >> the tax cuts barely passed at the early part of 2000. why didn't they make them permanent and we could have avoid this had kind of discussion? >> tax policies extremely difficult. they put it through the so-called reconciliation process, which doesn't require 60 votes. reconciliation laws, sunset after ten years, they're not permanent and that's why this one is sunsetting, rather than having done a, you know, a long-term tax reform bill. and tax reform is very difficult. >> why can't we get sunsetting on spending, and no sunsetting on tax cuts. we shouldn't be, that's what we should be sunsetting are the spending bills. we should be talking about wind energy that needs to be sunsetted, soon. you bring up the side of the cliff that no one talks about. the sequester, the automatic spending reduction, i don't think it would be a bad thing if washington took the sequester and showed that they could cut

spending. >> because we have a never budget balancing act going on with the journalist pointed out the secret gang of six meetings, that's budgeting by, secret gang of 12 meetings. and-- >> quickly that's what we use today call blue smoke and mirrors in washington and that's why people are upset at washington. don't trust them. david: good to see you. well, the numbers are in and you were not shopping as much as last year, apparently. holiday retail sales were basically unchanged from last year and sandy, of course, and the connecticut shooting got some blame, but what about no jobs and no money? coming up, the opening bell, futures are up. [ indistinct shouting ] ♪ [ indistinct shouting ] [ male announcer ] time and sales data.

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jumped out of a plane. finally, i became a ping pong master while recording debut album. how you ask? with 5-hour energy. i get hours of energy now -- no crash later. wait to see the next five hours. david asman, in for mr. varney. we're minutes away, dow futures are trading up. so at least at the beginning it may be a good trading day. now 15 seconds away from the opening of the dow, nasdaq and s&p 500 have been down the past two sessions, but as we hear the opening bell he, the first tick will probably be to the green side. let's check the board right now. we have no first trades. at 13,000, seems to be hovering around 13,000 for a long time, doesn't it adam? >> it does, because people are

waiting, we have five days. david: five days for the fiscal cliff, that's going to change everything. >> i agree with adam in trading. david: we're trading up just a tick now shall barely noticeable tick of 7 points. well tturned out to be a disappointing holiday season for retailers. retail sales up only 7/10 of a percent two months before christmas compared to last year. that's the weakest result since 2008 which was right after the recession hit. those numbers, according to master card spending pulse, nicole has some retail numbers, are they suffering, the stocks, as a result of these figures, nicole? >> right weeks, we're seeing sof them mixed and j.c. penney and macy's, you see the push and pull happening as the retailers are trying to find their footing. the point. story here, dave. you look at the number. rise of 7/10 of a% two months ao months coming into christmas. that's the weakest since 2008 when the recession hit.

it just shows you that consumer remain nervous, they're not out there spending frivolously, they're penny pinching, trying to get the best bet. and i like the title on the board there, you're not spending, that's true. people held back. david: there are a lot of issues. i'll take it to the company. there's sandy and the fiscal cliff. >> i'm not saying perhaps we should hold off saying that the consumer is nervous because spending pulse which did this survey and put out this expectation, even pointed out that in the northeast, in the mid alantic region because of hurricane sandy, spending was drastically lower than they would have expected so this could be a result of people being shocked by the superstorm not necessarily consumers being afraid. david: and there's also, by the way, the shooting. >> the interesting thing, too, national average for retail spending, 2, 2 1/2% growth from last year, the average nationally for the last decade or so has been about 4, 4 1/2%

growth. foot traffic still remains pretty strong meaning people are coming out to the malls to mange out and possibly not spend. david: what bothers me, saying that the fiscal cliff is stopping people. you're asking people shopping less because of-- i don't know, anybody, i don't know anybody, the fiscal cliff directly stopping people from shopping. >> these surveys, keep in mind that the national retail federation is still holding with white knuckles to the prediction we'll have increased growth of spending, and 586 billion dollar seenlz. so nrs has not changed its forecast. >> shopper track has. >> shopper track on monday went down from 3.3% to-- >> and shopper track has devices in stores that track it. david: what does your gut tell you a mediocre year. >> yeah, but i'm optimistic. david: personally i see anecdotal, fewer people than i saw last year shopping. >> i do it all online, and down

for you. david: well, if congressional leaders fail to come to some kind after agreement by the end of the year, tax rates go up, at least for everybody to pay taxes. did the republicans miss a opportunity to sign on to a promise the president made last year not to raise tax rates and what about nancy pelosi's pledge pledge. >> nick from the daily caller, did republicans miss a move here? >> i think they missed a opportunity if you go back to 2010 when they sweep the house and had the president in a position where he could support a permanent extension of the bush tax cuts, and they only went for the the extension for two years. david: why is that? only go for two years as opposed to a major change in the tax code? >> maybe they were hoping that they would win the presidential election in 2012 and then have a upper hand event. but you know, they didn't go for

the permanent rates, the bush era tax rates when they had the chance in 2010 and the sequester, the automatic spending cuts getting lost in the conversation are something they pretty much set up with the democrats in 2011. >> well, here specifically, here is about the millionaire cut off figure because of course, now the president says compromise going out to 4,000. here is what pelosi said in may of 2012 to speaker john boehner. democrats believe those earning over a million dollars a year should expire and we should use the resulting revenues to pay down the deficit. has anybody called her on that, hey, look, you're only for raising rates for millionaires and above before now you're into the $400,000 level? >> i called her on it last week, and she avoided the question and didn't answer it directly. she said, we were trying to smoke out, that was her quote, smoke out republicans and steny hoyer himself mentioned that it

was a ploy. so, i think they were trying to get republicans to agree to the millionaire tax increase and then see how far it will move even more. and it's politics, david. david: yeah, yeah. >> by the way the millionaire tax, only, it would basically raise money to cover eight days of government spending, but you know, david and adam, we've had the letter from nancy pelosi. do you really believe it was a ploy to smoke out the republicans? because nancy pelosi in her letter is equating millionaires to big oil, special interest and corporations. why doesn't the g.o.p. capitalize on that they really want middle class tax hikes when they're talking about raising taxes on the 250,000 plus crowd >> well, i think speaker boehner and the republicans in the house would be able to get some democrats support for the millionaire tax increase which i don't think they did enough of and they had to call off that vote as we all know on that plan.

but some democrats would support something like that, but we're talking here about the leadership speaker-- minority leader pelosi and you know, she, because now it's republicans proposing it, now they seem to be backing away. they might be able to get some conservative leaning or moderate democrats to support something like that. and the president, as we know, the white house has signaled they would even take 400,000 increases over-- >> david: here is what gets me about the president. i grew up in washington so i'm cynical about the process, and familiar with politicians breaking promises. the president said just a year ago when he was talking about changes in tax rates, he suggested there wouldn't be need for changes in tax rights, even of millionaires, let's play the tape. >> what we said i was, give us 2 trillion in additional revenues which could be accomplished without hiking taxes, tax rates, but could simply be accomplished

by eliminating loopholes, eliminating some deductions, and engaging in a tax reform process that could have lowered rates generally while broadening the base. david: all right. now, that was in july of 2011 and then a couple of week-- a couple of months later came out with the budget, saying the tax system should be simplified and work for all americans with lower rates and brackets. the president has come out time and again saying we shouldn't raise any kind of rates. is anybody calling him on that? >> well, a lot of republicans are wondering what's different now? we still have a sluggish economy, why the change in position? , but the president was out on the campaign trail, time and time again saying individuals and families specifically making over $250,000 a year should be-- should get tax increases so he's sticking to that position, like i mentioned before, the white house seems to be signaling that they would move in the direction

of 400,000, those making over 400,000 increases there which may be something that congress could agree on and get through. but again, we're going to have the conservative wave in the republican house saying no increases, so, boehner's going to be in in a position do i get democratic votes and risk speakership. >> boehner is between a rock and a hard place, no doubt. david: good to see you, from the daily caller. >> good to see you. david: government subsidies are suppose today make something more affordable for consumers if they work right. that's not the case, especially for so-called green energy and wind power. noi, thnow, the taxpayer, you, e out billions more. find out how much and when at the top of the hour. meanwhile, back to nicole, netflix is blaming amazon for outages that hit the streaming video service right at the worst time, christmas eve we all want to see the movies, more than 27

million subscribers could have been affected after a outage at a amazon web service center in virginia. how is all of this affecting stocks, nicole. the stocks slightly to the down side. that's the point. christmas eve a lot of people are home or ready to access their online services, this is a huge source of revenue for netflix and to have a outage, particularly on a key night like christmas eve, not good news there for netflix, and you see it below 90 bucks. david: all right, nicole, we'll be keeping close watch see how netflix is affected. and now i have your seven early movers looking atling th at thet winners and losers, bank of america, a huge move for bank of america. moment depot up 46% this year as well. disney up 33% this year. jp morn, the bi morgan the big . up. imcdonald's down 11%.

and the biggest dow loser hewlett packard down 45% for the year of 2012. well, iphone versus android. kindle versus i-pad. apple, google and amazon all going to war in 2013. who comes out alive? and don't forget facebook, they're in the mix as well. telecom ceo is next to tell us mo he thinks will come out on top. [ male announcer ] at scottrade, you won't just find us online, you'll also find us in person, with dedicated support teams at over 500 branches nationwide. so when you call or visit, you can ask for a name you know. because personal service starts with a real person.

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let's take a look at the big board, well up to 35 points on the dow a couple of minutes ago and now pulled back to 21. the futures were positive, but they indicated a move much bigger to the positive side than what we're seeing now, and again, in the past couple of

minutes we've seen a pullback. the high was 35 is now at 21. take a look at oil trading way up over the $90 a barrel mark. look at that, up 2 1/2%, $2 pushing it well above the $90 a barrel mark and we've heard that this is going to happen and ironically this comes just as we're getting kind of a slowdown in the price of gasoline, even though it's still at prices higher now than it was about a year ago and still, it is eventually probably going to reflect itself in the price of gas. oil up over $90 a barrel. well, apple makes iphones and makes computers, google is it a search engine, amazon a big online store and facebook is a social network, that's the way it used to be. well, now, the companies are constantly invading each other's tough. so, who is going to win the turf war. larry is here from dine link to tell us. so, apple, people thought it used to have a hold on certain markets. obviously, that hold was broken with the android phones, it was

broken with kindle fire and other, other attacks at its dominance in the tablet area. where will all of this end? >> let me say the tech tore is more than your wrist over hang gliding over the mountain ve s.u.v. ious. if you're not going to make it, it's about e-commerce and advertising. david: apple has a huge dominance in apps, right? >> yeah. david: don't they win by the sake that they're far ahead of competitors in apps? >> they're not going to win unless they're more into apps and content. apple is about the new-new. and the new-new is about the new products. a lot of the problems that everybody is getting into are lost leaders. you need to be in content. you need to be in apps and you need to be in mobile because of

the mobile moneyization. they need to get into it. and siri was the beginning of the search engine business. david: siri was the first attempt to change the way we searched for things. we used to search on google, but siri talk to it and tell it what you want, does it work that well? a lot of people are disappointed with it. adam-- >> cool occasionally, but only thing i would use it for-- >> you default to google. but i'm also a middle aged guy. >> siri has a way to go, but apple has a ton of cash and r and d dollars, research and development, and they need to get-- >> there was a report, i forget which channel put it out, but at the end of the day you have 7 billion people roughly on the planet, potential customers. majority are going to be buying android based operating system devices. david: you mean like the galaxy phone and-- >> and they have a market, but

it's limited. will apple will have eventually have a limited market? >> i don't believe so. i don't believe so. i think they're going to continue to grow and i think in a lot of the emerging markets where you're seeing enjoyed you may see a little more, but i think that apple is going to continue to agree. david: e-mac, if the content is the key here, if we find out -- if you go on to netflix i'm disappointed i can't get a particular movie i'm looking for, i can't get the content, but apple has so much money and netflix probably has what, 5 to 10 million max and apple has over 100 billion in cash. they can make the deals with hollywood, hollywood dynasties to run any kind of movie. >> and apple could buy facebook or netflix easily. i love netflix personally, i think it's great. and apple is the big gorilla here. who is left standing in ten years? i mean, facebook, a lot of defriended facebook and one big

giant app anyway. >> they're going to continue with the mobile and a billion plus users, the major player facebook. david: larry, appreciate it. >> thanks for having me. david: time for your morning gold report. we saw oil popping dramatically about 2 1/2%. did it gary over to gold? let's take a look at the price of gold. it's up, but not substantially. we saw the price of oil go up 2 1/2% and the price of gold going up 7 1/2-- 7 1/2 dollars, translates to 1/2 a percentage point. so a jump for gold, but not as big as we saw in oil. 1666. who on your street has had a gun? what if there was a map to tell you who specifically on your street had a gun? people say it's a invasion of privacy. others say it is a red carpet for criminals, everyone is fired up about this story, we'll be, too. stick around, that's next. ♪

the scarlet letter of gun ownership. a local newspaper in new york putting a map on its website. take a look at this. all the red dots you see, those are the homes where a owner has

a gun license. this is all on the public record, but how do you feel about publishing this information? >> we just broadcast it, are we culpable. david: specifically for people to find a house-- >> it doesn't necessarily pass-- i think a lot of people, 50-50 i think most of of us feel uncomfortable with that kind of-- >> ina invasion of privacy and plus the people who don't own a gun are vulnerable to those who don't have a gun and could be vulnerable to crooks. and i like the newspaper is justifying the action, look, our reporter owns a gun. where is his address printed in the newspaper and are they going to print the addresses of everybody in the newspaper? you don't see that information. maybe then they'd see how people feel about invasion of privacy. david: i don't know-- i don't mind that the crooks know i own a gun. break-in rates are less in texas because people assume they have a gun. the privacy bothers me a lot. the government, obviously, the

government can get whatever they want, but any particular government official would know if i have a gun or not. >> when you register, i mean, the basic laws just to purchase a gun, a handgun or something else, you've got to fill out the forms and they know from that moment. where you're going with that. >> the fact that i think i have a right to own a gun in the privacy of my own home and that where privacy is very important to me. >> what about the people's houses that don't own a gun and concerned about those and will the criminal find them. david: in other words, the criminals would prey on the houses that don't have a gun. >> it's not fair to anybody to have such a invasion of privacy. >> president obama is headed back to washington to work out a deal on the fiscal cliff or is he? does he really want us to go over? and specifically what would happen if we do? we will ask former clinton strategist doug show hen in just schoen in a fewminutes and the y that isn't.

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lyric from phonak. life is on. david: good morning varney & company viewers. i'm david asman. stuart will be back tomorrow. new at 10:00, federal subsidies for wind power are set to expire in a couple of days on december 31st if congress decides to

extend those subsidies, you the taxpayer will be on the hook for 12 billion dollars just for next year alone. since 92 the u.s. has spent nearly 24 billion dollars on wind energy, but get this, it hasn't gotten any cheaper, not a penny. it is still one of the most expensive ways to get energy. so we will be discussing that. let's check the big board. we're up 27, 27, 28 points. again, it reached a high of up 35 points on the dow, a little earlier this morning. it pulled back from that and then is going modestly upward as well. we're not expecting big volume today, but we have big topics to talk about with our company: elizabeth macdonald, adam shapiro they are here. nicole petallides from the floor of the new york stock exchange. more signs of recovery in the housing sector. the case shiller home price index up more than 4% compared to last year. so nicole, how are the homebuilder stocks doing? nicole: right, it is interesting when we take a look at the numbers. let's look at the stocks.

they are doing quite well, for lennar, up over 1%. then's on a -- and that's on a day where the dow is just virtually 2/10 higher so -- percent. so pulte group, toll brothers also gaining nearly 1%. with the case shiller numbers month over month, october versus september you did see a gain. that gain we saw was the loss -- the loss of 1/10 1 of% were better than expected -- 1 pent -- 1/10 of 1% was better than expected. you are seeing strength in areas such as san francisco, detroit and phoenix, you are seeing growth there. some experts are saying that the housing recovery we're seeing here is gathering strength. people are starting to believe in the recovery little by little. david: still have a long way to

go, though. nicole: right. david: improving a little bit. thank you very much. federal subsidies for wind power are set to expire in a couple of days, december 31st. extending them for one more year would cost 12 billion dollars. this according to the joint committee on taxation, which is a pretty neutral committee. so company, when they went into effect 20 years ago, even the congressman who pushed for them said they should expire, said they should be sunseted and they are nowhere near that happening now. adam: if you believe that the government has a role to help new technology get a foot in the door, then the foot's been in the door for a long time and they keep slamming it on us. david: you bring up a point. the reason why the door keeps getting slammed although the door to the subsidies continues to be open is because it is getting more expensive to produce energy by wind power, not less. going in the opposite direction. adam: there's a lot ways to look at this, i'm going to look at

this from we can't afford to spend the money we don't have. david: if it doesn't pay off, we're still wasting money and those are billions of taxpayer dollars we're wasting. liz: we may not waste money if you put the wind farm outside congress with all the fighting going on down there. what i love about this story, this is classic case of keep irrational hope alive. if this was commercially viable -- by the way, the issue is private sector companies gets all sorts of tax breaks and loopholes, if they can't do it, if they can't pull off wind energy, why would completely government backed companies do it. nat gas is really cutting into wind energy. david: it is interesting you say that because specifically when we say that wind energy costs more, let's be specific about it. 1 million watt hours generated, that's how they measure these things. with wind energy it's $52. that's how much it costs to produce 1 million watt hours. with nuclear energy, it is $3.

with natural gas, it's 63 cents. they're so extraordinary. adam: absolutely you would go with natural gas. it is kind of electric cars versus -- if you buy a ford focus with a 4 cylinder engine, you will wind up much better -- [speaking over each other] adam: one man's subsidy is another man's -- [inaudible]. phil graham voted in 99 when he was senator to stop this kind of spending. david: two wrongs don't make a right; right? liz: i'm for green energy, yes, in certain ways but not government backed. david: the bottom line, this is

a department of energy study by the way in 09 found that the average wind power costs were higher in 09 than they were in 94 when all these subsidies began. all of these are supposed to bring costs down, but it's had the opposite effect. the g.o.p. is in disarray, i think that's fair to say. they missed an opportunity to not raise tax rates. now president obama is ready to fall off the cliff to bring in more money for the government. joining us now is doug schoen. doug, i've got to ask you directly because you hear a lot of this off the cliff stuff. specifically what would happen? what would happen to the private sector? what would happen to the government if we go off the fiscal cliff? >> sure, well, it's anyone's guess, but i think we will see economic activity slow down, david. i think we're going to see with the certainty of tax rates raising on all of us, that people contract their economic activity and given the cbo estimate, if we go into a

recession, i think it will be cataclysmic for the american economy. david: specifically with the government, i remember during the clinton years when we had that debt ceiling thing that we went off of and that the government shut down -- would we see a shutdown in certain government agencies if we go off the cliff? >> i'm not sure we're going to see a shutdown, but we will certainly see a lot less economic activity, and particularly in the military sector, i think defense procurement will ground to a halt, and that will have, again, an impact on the economy and it will be deleterious. david: let's talk about the politics of some of this. >> sure. david: nancy pelosi -- i very rarely agree with her as you well know. >> i do know. david: but she said something i kind of agree with. she was talking about the republicans. she was defending her comment last may that taxes should only go up on people earning a million dollars. she's come down now to the president's level of 400,000. but she said -- she counter attacked as she often does, she said republicans have already become a little bit pregnant on

their tax plans that they're never going to ever raise tax rates. i would have to agree with her. once boehner went off his cliff, if you will, on his pledge not to raise tax rates believing as you just suggested if you raise tax rates, you will probably have a slowdown in economic growth. once they went off that cliff -- what do you think? >> well, i agree with both you and nancy pelosi that bottom line, the republicans fell into obama's trap. they went for a tax increase, david, but what they didn't do is outline a strategy for economic growth, for job creation, for stimulating the economy. bottom line, obama's talking redistribution. the republicans are just getting moved by a president who is playing political games with them. david: when you say republicans didn't come out with a plan to stimulate the economy.

republicans don't believe the government can stimulate the economy. what could they have done? >> what you have been talking about for years a strategy using a tax system to stimulate economic activity through a series of lower tax initiatives that would offer the prospect for growth, a la jack kemp. liz: but keeping the bush rates for the middle class, that helps the middle class, that's a g.o.p. victory there. i will tell you say something, what the g.o.p. is fearful of getting rather pregnant as pelosi says with their tax rate being lowered is defeat, giving birth to an electoral defeat if they go along with these tax hikes that the white house wants. doug, i have to tell you

something, we still have a debt ceiling fight coming at us in march. is the g.o.p. right to stand their ground and say no tax hikes, we want to help everybody, and we are not going to exchange these poker chips in the debt ceiling fight saying hey, we're going to get entitlement reform from you the white house. this is about the little guy on the street in all tax brackets. >> if the republicans the had as coherent position as you do, liz. take three republicans you get four positions. bottom line, there's no republican strategy on anything, either on taxes, on spending, entitlement reform, and certainly not the debt ceiling which is why david was right when he began his comments by saying that the republicans are in bad shape, and bottom line as a matter of politics, the republicans are losing, more importantly the american people are losing even more. david: doug, adam and are a little bit theorists. we believe the president does want to go over the cliff. you look at the spending that

took place during his administration. from 08 to 09 we saw a big jump in spending because of the stimulus plan. that was an 800 billion dollars plan. but then that spending level just continued. he substituted all of his special spending programs with all of those in the subsidy, the stimulus subsidies so that we ended up with this high baseline. he needs much more money than just taxing the rich can bring in, that's why he might want to go over the fiscal cliff. what do you think? >> well, i certainly don't think he's going to be crying crocodile tears if we go over. i think it is more base politics. i think he thinks he wins the fight if we go over the cliff and the republicans are blamed and then the republicans will do business on his terms. you and adam may well be right, but bottom line, nobody is puttings the country first -- nobody is putting the country first, he nor the republicans have a centrist program like

simpson bowles. david: thank you very much, doug schoen. >> happy holidays to you. david: happy holidays to you. thank you doug. our next guest from laptopmag.com is joining us about ten minutes from now. is blackberry all but finished? we will have an answer coming up. meantime, let's take a look at some retail stocks with nicole. nicole: the retail stocks are moving in the wrong direction if you are bullish on the group or have high hopes for shoppers and the economy. take a look at coach, down 2%. urban outfitters much of the same. also dropping about 2%. when you look at the s&p 500 which is actually squeezing out a gain, it is up 1 point. the five biggest losers on the s&p 500, 500 companies of all

walks of life are all the retailers. it shows you now the day of christmas. we got in that spending number from mastercard and that spending number actually showed retail sales gaining .7% year over year. we said that's the weakest since 08, right during the time of the recession. so not a great showing, david. david: all right, nicole, let's hope they do better before the day is out. speaking of retail, folks, why aren't you shopping? is it really just the weather or is it something else? we will be asking market watcher keith fitzgerald coming next. [ malennouncer ] it's tt time of year again. time for citi price rewind. because your daughter really wants that pink castle thing. and you realldon't want to pay more than you have to. only citi price rewind

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david: president obama cutting his hawaii vacation short to get back to washington to discuss the fiscal cliff. let's check the big board and see how the market is looking just days before americans could plunge off that cliff. it's been pretty steady at about mid 20s to the plus side on the dow. well, netflix shares are down as it blames amazon for outages that hit the streaming video service on christmas eve, more than 27 million subscribers could have been affected after an outage at an amazon web service center in virginia. full service was restored on christmas day. the company being blamed, amazon, shares of amazon are also down today, and what you might see written on your next cup of jo from starbucks. we will tell you what that is coming next right here.

david: well, you might start to notice that starbucks employees are not writing your name on your latte, but they are putting a message there instead. a new campaign from a starbucks chief executive is urging his employees to write come together on customers' cups as a message to lawmakers as an effort to urge lawmakers to come up with a deal to avoid the higher tax

rates and the spending cuts of the fiscal cliff, we will see how that affects the stocks. u.s. retailers report the weakest holiday sales since 08. sales in the two months before christmas increased .7%. some analysts say that the 2012 shopping season was affected by bad weather and people's uncertainty about the economy. joining us now is keith fitzgerald from money map press. keith, do you think really think that's affecting people's shopping habits? i think they are just worried about the money in their pocket. they don't have as much of it as they used to. >> i'm with you. i don't think it's the weather. i think that's always an easy thing to blame. the reality is the average american has less money in their pocket. they're very concerned about the lack of adult supervision in washington. retailers in part to be blamed for this, they spread holiday shopping across multiple seasons and outlets at a time when consumers don't have the money. they're missing the boat here. they have done it to themselves. the specials are very aggressive after christmas. we have a few days to make this

up, but i don't think it is going to happen. david: housing is a good story, we have been talking about it this morning, it continues to improve, thank goodness it does because so many jobs depend on housing. with the exception of that, we have seen i would say a sort of slowdown in already slow recovery over the past couple of months, i just sense that that's beginning to work into people's buying decisions right now. >> i would agree with that. i spend a lot of time my traveling around the united states and the world, in fact, i see consumers very uncertain about the fiscal cliff and the taxes. what i hear a lot is they are really worried about inflation. the government says it doesn't exist of course but reality is everybody is experiencing, 9, 12, 15 percent in their pocketbooks. evidently these guys from washington don't eat or drive. david: everything that you need to buy because they factor in all this other stuff has been -- i just bought a pound of coffee

and i remember the same kind of coffee costing $4.99 when i bought it about a year ago, because my wife i must admit does most of our shopping, it now costs over $8. i mean, you know, coffee, milk, meat, everything is going up. >> we see the same thing, when i go to costco, for example, with my wife, i see salmon that used to be 8, 9, 10 dollars a pound, it is 17 to 20 dollars a pound. my wife from japan tracks those things very carefully. i'm very proud of her as a shopper, but i hear about it consistently. adam: keith, i'm adam shapiro. i want to know where do you get the figures that inflation is at 20%? give me where that comes from because that seems pretty pretty high to at least my ears. >> you bet. i think that if you look at a couple different sources. you can track it individually. you can look at what your health insurance premiums are doing, your education bills but y favorite site is something called shadow stats, they track

cpi and it varies between 8, 10, 12 percent depending on which versions you use. because every administration seems to adjust those figures to proactively reflect and keep them down. and the government has every incentive to do that because cost of living increases are tied to that, military spending is tied to that, a lot of things are tied to cost of livings increases that are in fact tied to inflation. david: let's face it, the federal reserve has become a branch of the u.s. government essentially. it's supposed to be a private institution. it's been essentially printing money to bail out all of the free spending politicians. that means less money in our pocket. >> well, that's right. you know, this illusion that government spending is in fact going to make up for the private spending gap is just that, it's an illusion. it hasn't worked that way throughout history on anything other than a short-term basis. it may stave off the pain now, but it is really a game of kick the can down the road. sadly these guys in washington who have had months and years in fact to work on this, don't seem to understand this is government at the expense of the people not

for the people. david: even my friend richard fisher who is in dallas texas by the way not even washington but i think he has it wrong. i see inflation saul over the place. -- i see inflation all over the place. keith, good to see you. >> happy holidays. david: the hits keep on coming for research in motion. it is betting big on its new blackberry software, if it flops, so does the company. and that story is next.

>> it's all about the content apps and mobile. that's what the big play is. if you're not into content apps and mobile space, you are not going to make it. why i say that, it's about e-commerce and it's about advertising. david: in our last hour, on the heavy competition between apple google facebook and amazon. remember to tune in every weekday morning at 9:20 sharp. that's when varney & company begins. let's take a look at the markets. we are off, way off where we were. it looked like we had a -- kind of a strong positive start to this market. the futures were up double digits 30, 40 points. it went up to 35. now it's pulled back to 12. a lot of depressing news about retail sector clearly having an effect on the markets today. gas prices, though, are at their low for the year. and that means more money in your wallet. will prices at the pump continue to drop next year?

gasbuddy.com joining us to tell us in a few minutes. research in motion, the company behind blackberry plunged more than 20% after it released its earnings. an announcement made by company's ceo about a new pricing structure has investors concerned. users would continue to pay for certain services, like advance security but other services would generate less revenue. joining us now is our next guest. this is something that the average consumer doesn't think about, but it is affecting investors. >> a lot of people don't realize that the service part of rim's business generates a lot of revenue. a lot of that comes from the carriers. they have decreased their market share so much, now at 4.7%. the carriers realize they are in a much better bargaining position which means rimm will eventually have to charge less for the services and that means less revenue coming in. david: let's talk about the future of the actual product itself, the blackberry. we were in a meeting this morning, we were talking about the demise of rimm, 6 out of the 7 people in that room had

blackberries and were using their blackberries. there are a lot of companies because companies have trouble changing, once they get used to the corporate culture, once you get used to something. i haven't seen the major shift yet, either to the android service or to iphones. have you, from blackberry? >> it is coming in dribs and drabs. and a lot of it is because bring your own device trend. david: again, corporations tend to be stodgy institutions. they don't move too fast. and when you were doing your accounting, if you're switching to apple bills instead of the blackberry -- it makes it more difficult for the accounting department. >> it does. there's an analogy in the computing role too. think about how many businesses are still on windows xp president -- windows xp as opposed to to windows 7 or 8. adam: regarding rimm, one argument people make in favor of

it, is -- [inaudible] -- is that going to be enough to offset what you are talking about? >> i don't think it will be enough in the short-term. even in those marketses, they are seeing their share decline. like samsung, they have larger screens, they have their own enterprise developments that they are developing to make sure their devices are more secure. david: they are doing gangbusters in china as well, the samsung galaxy is far outpacing the iphone 5 right now. >> what rimm has going for it is they do have 78 million subscribers and they are known for the security. they are known for a compression technologies that make the web surfing faster. if the user experience of blackberry 10 and developers don't get excited about the next platform, then they are toast. david: one thing they have surprised me about iphone or about apple in general, is they haven't taken advantage of the problems that rimm has to get into the business market. they are so focused on getting the new jazzy thing for the consumer, rather than the business user, that they haven't

tried to invade that market. does that surprise you? >> yes, to a certain degree. i think mostly on the ipad they are making a lot more inroads than they are with the iphone. iphone is sort of still a back door sort of deployment. i think once -- sort of microsoft might wind up helping apple in the sense that a lot of people think they are developing office for ios. if that comes out, i think a lot of people will turn towards ios. liz: you make a great point about security. that's why security authorities in the united states, federal government uses blackberry. >> that's right. liz: the other thing too is we've got the baby boomers really retiring in mass, and they want that big screen. they don't like to have that little problematic typing situation with the iphones. that's why they like the blackberry keys. >> yes. liz: do you see apple adapting to that and having a bigger screen with bigger key pads? >> yes, i do. i think ultimately it is all about user choice and people are going to want an extra large iphone, and if they don't, samsung is going to do it. what i do give rimm credit for,

they're coming out two types of devices for blackberry 10. one will have a large screen with new predictive key board so if you are typing and the word shows up, you can swipe up from the key board and it will show up. they are actually going after baby boomers in that sense, but will make traditionalists happy with the standard key board. david: the most popular gift you had this christmas season is a pogo stick that you bought for your kids? >> yes. but the nintendo ds also did well. adam: who would buy rimm honestly, the patents you were talking about, the security features, who would best capitalize on that? >> concentrating on enterprise more than ever before, like hp and dell to a certain extent because they have sort of given up on the consumer marketplace so they might be targets for that. david: mark, who i'm proud to say bought a pogo stick for his kid. even though he's into all this electronic stuff. good to see you mark.

thank you very much. federal subsidies for wind energy are set to expire after 20 years. they have been in effect that long. that's not good news for california which bet big on wind energy. republican strategist is in california. we talk to him coming next. [ male announcer ] you are a business pro. omnipotent of opportunity.

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david: joining the company now from chicago is larry levin with trading advantage. larry, we hear a lot of theoretical talk, political talk about the fiscal cliff, let's get real specific. we actually have a chart of how much you're paying in taxes now on the left and this is how much extra you would pay if you go off the fiscal cliff. so look at that, if you're 50,000, you pay about 1200 bucks more. 100,000, $3600 more. how specific -- that's how it would affect individual income tax. how would it affect the economy and specifically the commodity trading that you do? >> well, it's for the stock indexes that i trade, the s&p and dow jones those markets i think will take a very large hit. in fact a good example of that would be what we saw about week and a half ago when we saw the republicans come in with the vote and then tend up not taking the vote at all. we saw the s&ps lose about 30 handles overnight, got a lot of that back because everybody thought they would go back and talk again. that's a really good example, a

little bit of foreshadowing if you will of what's going to happen to the market if we go over that fiscal cliff, if we get beyond the point where they don't make a deal, i think the markets will take a very large hit. certainly see the s&ps below 14 hushgsz -- below 1400. see the dow a lot lower than it is right now. i think traders who have been long these markets looking for the santa claus rally not real happy about that. people want to see the market go up, and i don't think that's necessarily going to happen. david: if we go over the fiscal cliff, would the markets be pricing in a recession? >> i think they would. i think they would certainly be pricing in a very good chance of recession. as you know, it's that self-fulfilling prophesy. if people all agree on the same thing happening, that's a big issue. i think we will certainly see that as a result in what happens with the markets. david: psychology of the markets, it is a real thing. thank you, larry. federal wind subsidies are set to expire at the end of this year. if congress renews them, it is going to cost taxpayers 12 billion dollars. that's next year say alone. if you want an idea of what another year of wind subsidies

looks like, just go to california. they bet big on wind and well let's let our next guest tell you how it went down, from front line strategies. the investments in wind power in california, how did it turn out? >> so far it hasn't proven to be the panacea that i think governor brown and the california legislature had predicted. last year as a matter of fact i think we created about 3,000 jobs in green energy, that's total. that's all renewables. and at the pace that jerry brown promised, 500,000 new jobs over the next 10 years, it will take him 167 years to actually make good on that promise. david: by the way, the "wall street journal" looked at the government's figures, the federal government's figures about how many jobs were supposedly created by wind power, by a 4 billion dollars wind power project involved over 30 wind power farms, and the government claimed there were 7,000 jobs. the journal sent reporters and called in to each one of those locations, found out there were only 300 jobs. the government said 7,000.

in actuality there were only 300. you can't even depend on government stats to back up their job creation numbers. >> well, they put a tremendous amount of investment into this green jobs right now. and frankly the thing we worry about is governor brown has now mandated that 33% all of energy has to come from renewables by the year 2020. this tax credit going away is going to put a serious crimp on that promise. david: margaret thatcher's famous line, eventually you run out of other people's money. california is practically there. it's really run out of money. it's operating on the basis of fume. you are losing a lot of rich people, from whom they thought they would get the last dime are leaving the state. you look at the price it costs to produce energy from wind, $52 per 1 million watt hours when it's 63 cents by natural gas. isn't the economic reality of this eventually going to force the government there to make changes? >> well, they are going to have to, because we know not only is it unsustainable, but it is

unreliable. what's not projected in those costs david is the fact that for every wind turbine farm there has to be a connected fossil fuel turbine that's running constantly in order to make sure the power grid isn't upset when the wind tends to come. also inefficient because peak production hours for wind come at a time when most of us are asleep, whereas peak usage hours are between let's say 9:00 and 10:00, where the wind tends to die down a little bit here in california. you see it is not only unproductive and it is inefficient, it is also way too expensive to be sustainable. david: i don't think this is the main issue but it is an issue that bothers some people out there. birds get killed a lot by these things, you know. >> oh, yeah. david: suddenly all of these people, the wildlife foundations, etc., eco people, why aren't they screaming because a lot of birds are getting murdered by these things? >> sierra club has joined a

couple environmental groups trying to block a couple of wind turbine plants in the county here. here's the interest thing, the state of california is protecting a lot of these new projects because they want to give them time to quote unquote mature without the legal entanglements that come with the lawsuits. just one turbine farm in northern california kills anywhere from 75 to 100 of these golden eagles per year and that's not counting the thousands of other birds and bats that are on the endangered species list and yet they are exempt from prosecution because of the fact they want these wind turbine farms to succeed at any cost. david: not only prosecution, but also fines, they don't have to pay any fines. >> nope, they are free and clear. david: it is definitely a double-standard. mark of front line strategies, good to see you. thank you for coming in. >> thank you. david: gas prices flat overnight, but in the last month they have been falling. will we see even lower gas prices next year? we get the expert to chime in.

gas buddy -- gas buddy is next.

david: u.s. retailers reporting the weakest holiday since 08 when of course the country was in deep recession. sales in two months before christmas up .7% according to to mastercard spending pulse. analysts are blaming sandy and the shootings in connecticut and also of course uncertainty about the economy. research in motion the company

behind blackberry is bouncing back today after it declined recently. set to release the new blackberry 10 in less than a month. the company has pinned its hopes on that device. check the price of oil, popping big-time, look at that, $91. not only is it above 90 but just for a second it was at $91 for a barrel. the price of gas is at 3.24 per gallon. that's the national average. you see the temporary halt in a long slide in gas prices. will they start falling again? patrick sheehan from gas buddy.p com is going to be here next -- from gasbuddy.com is going to be here next.

david: gas prices are at their lowest point this year, but compared to last year prices are still higher. will they continue to fall in 2013 or have we hit rock bottom? joining us now is patrick dehahn from gasbuddy.com. good to see you. first of all we have to talk about the price of oil. eventually of course that's where gas comes from. it is up over $91 a barrel right now. how soon before that begins to trickle into the price of gas? >> you know, it probably will be pretty quick. we look back at the last 7 years and 6 out of those last 7 years we saw gas prices take a jump between christmas day and january 15th. so it is likely the party is already over. the national average is popping up a bit. wholesale prices are moving higher just as oil prices are, so we expect some translation into the pump here within the next few days. the party is over. we hit our low. prices will begin rising again

as we approach 2013. david: now i can't disagree with you, but i'm going to put out a couple arguments that might be disagreeable to that notion. one is demand destruction. the fact the higher the price of gas goes, particularly if the economy -- if we go off this fiscal cliff which means we could go into a recession, which means people are going to have to cut back on all kinds of things, one of those things would be their trip to wherever, driving their car, maybe they will take a bus instead, won't that bring down prices a little bit? >> it certainly will if we go over the fiscal cliff, that could send the country into recession. that's the whole fear here is that we do go over the cliff and then yes, gas prices are likely to move lower. they could move substantially lower. but there has been some talk on the front of the fiscal cliff. there's some sort of resolution that will likely be hammered out, and so i don't really foresee us going off the said cliff, but certainly gas prices may be lower in 2013, even if there's some sort of resolution,

we may fall in a yearly average somewhere between 2011 and 2012 average, so it may be a bad year but shouldn't be as bad as what we saw this year. liz: patrick, it seems like every two or three years for the last several years, you know, the country goes into a panic attack because by june or july we see $5 a gallon for gas. what are your forecasts for going into the next summer or even into the spring? >> well, believe it or not, in all the months and the year, all 12 months, there's only one month that we believe prices may approach $4 a gallon on the national average. now, of course california will be the exception here, and of course will be much higher than the national average. but our forecast look for 2013 that isn't quite as bad as 2012 was, very similar. we will likely see two price peaks. we will prices pop in the springtime as they always do ahead of the switchover to summer gasoline. and we likely will see another price peak later in the summer corresponding with the peak of hurricane season.

that of course is something we're now aware of after katrina washed many oil platforms out. that's certainly a concern as well. two price peaks, but i don't believe the national average will breach $4 a gallon in 2013. >> patrick dehaan gasbuddy.com. we appreciate it. >> thank you. david: we will tell you the details of unions next. ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all onhinkorswim from td ameritrade. ♪

david: workers from boston to houston are threatening to walk off the job. the strike could disrupt billions of dollars in shipments and cripple supply. now the two sides have agreed to meeting after talks stalled earlier this month. that could cripple the economy. adam the one in los angeles about ten yearings ago cost a billions -- ten years ago cost a billion dollars a day. that's just one port. this is going to be newark, the gulf ports down in houston. adam: what seems to be a sticking point is a fee that the men and women who unload the containers get paid by the weight of the container. one thing not knowing too much of the details of where the hold-up is, the containers are getting larger and larger. what the ports are saying is it's too expensive. it hit a point where the the

fees can't keep growing. they want to cap it. that seems to be where they are at loggerheads. you don't want to shut down commerce in the united states and that's what this will do. liz: it would stretch from maine to houston apparently. it would choke supply chains across the country. and whether or not the federal government would step in and mediate this one is going to be a key issue going forward for any similar labor disputes. david: if the government does, of course the obama administration has been seen as being pro union, would that continue to be pro union even though being pro union could cripple this economy. liz: it depends on whoois on the board. this could turn into ten day port lockout, that's what the threat is. if you hang that over the u.s. economy, who else could do that and make those threats? david: is it another nail in the coffin for traditional print

journalism. we love the print journalism. does anybody under the age of 25 care? liz: that's the key. google made more in advertising revenue than all of media combined last year. that's really a danger zone. i mean "newsweek" started in 1933 at 10 cents an issue. i mean there's a nostalgic value to it. now the parent owner is iac interactive. again, a web-based kind of a company. david: barry diller's outfit. liz: the question is is it generational? our generation and higher likes to hold print in their hands versus the younger generation. david: there are a lot of us around who can buy newspapers and magazines, but not enough to continue these -- adam: so long, love my ipad -- david: will they go entirely? adam: there will be a few

newspapers. the "wall street journal" is profitable and does just fine. so there will be some that survive but having numerous newspapers that run the same stories from ap, nationwide it is no longer necessary. liz: google made all more than the print media combined in ad revenue. adam: radio stations, tv stations ownership rules of the fcc revised those, tv station can own all in a local market. so they can merge can become more efficient so the paper can survive and tv can survive as well. david: those rules are out of date because congress are out of date and the president is out of date on these rules. the bureaucracy will never catch up with the technology, will it? adam: no, unless they pay for it. david: the highlight reel is next.

david: here it is. the highlight reel. we believe the president does

want to go over the fiscal cliff. >> boehner will be in the situation, do i get democratic votes. >> this is about the little guy on the street said that the republican people are losing. the american people are losing even more. david: are we going to go into a recession if we go off the cliff? you think we will be back i am not so sure about it. if you will cut spending, that is the issue. would we go into recession if we go over the cliff and they do not restore the spending cuts?